Good morning, everyone, and welcome to Lowe's Companies Third Quarter 2018 Earnings Conference Call. This call is being recorded. [Operator Instructions] Also, supplemental reference slides are available on Lowe's' Investor Relations website within the Investor Packet. While management will not be speaking directly to the slides, these slides are meant to facilitate your review of the company's results and to be used as a reference document following the call. During this call, management will be using certain non-GAAP financial measures. The supplemental reference slides include information about these measures and a reconciliation to the most directly comparable GAAP financial measures. Statements made during this call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Management's expectations and opinions reflected in those statements are subject to risks, and the company can give no assurance that they will prove to be correct. Those risks are described in the company's earnings release and in its filings with the Securities and Exchange Commission. Hosting today's conference will be Mr. Marvin Ellison, President and Chief Executive Officer; Mr. Bill Boltz, Executive Vice President, Merchandising; Mr. Joe McFarland, Executive Vice President, Stores; and Mr. Dave Denton, Chief Financial Officer. I will now turn the program over to Mr. Ellison for opening remarks. Please go ahead, sir.

Thank you, Regina. Good morning, everyone. As reflected in our earnings released earlier today, the strategic reassessment of our business continued in the third quarter. Our top priority this quarter was taking the necessary steps to build a sustainable foundation to position Lowe's for long-term success by exiting underperforming stores of noncore businesses. This will allow us to intensify our focus on our core retail business. As part of the strategic reassessment, we've made the decision to close 20 U.S. stores and 27 stores in Canada as well as 4 other Canadian locations. We also intend to exit our retail operations in Mexico and our Alacrity Renovation Services and Iris Smart Home businesses. These were difficult decisions to make, and we believe we can deliver the greatest return to our shareholders while focusing our attention on running outstanding retail businesses in U.S. and Canada. These actions send a clear message that we'll no longer pursue ventures that dilute our return on capital. Instead, we're committed to a more effective capital allocation process that will deliver better returns to our shareholders. I'm pleased to announce that we have substantially completed our strategic reassessment of the business, and now we can shift our attention to improving execution in our retail stores and online. And of course, we'll continue to evaluate all elements of our portfolio annually. Now let me comment on our performance in the third quarter. We delivered comparable sales growth of 1.5%, driven by a 2.3% increase in average ticket, partially offset by a 1% decline in transactions. Our U.S. home improvement comp grew at 2%, with positive comps in 11 of 14 geographic regions. And as expected, the Tampa and Houston markets had the weakest comparable sales in the quarter due to tough prior year comparisons from Hurricanes Harvey…

Thanks, Marvin, and good morning, everyone. Today marks my 99th day with Lowe's, and I'm pleased to be here to discuss the performance of the merchandising team. As Marvin shared with you, we posted comparable sales growth of 2% in U.S. home improvement this quarter. The favorable macro environment, combined with great values and events, drove traffic to our stores and website, but the continued challenges with out-of-stocks, poor reset execution and assortment issues in certain categories put pressure on our ability to turn those visits into transactions. Let me take a moment to discuss some of the positives from the third quarter. 7 out of 11 merchandising departments had positive comps in the quarter. Seasonal and outdoor living, appliances, lawn and garden, kitchens and rough plumbing and electrical all delivered comps above the company average. Seasonal and outdoor living led the way with high single-digit comps, driven by double-digit comps in grills and lawnmowers. Along with the increased demand driven by the inventory rationalization activity, in addition, we also delivered on the response for hurricane-related products such as generators, air conditioners and dehumidifiers. Our lawn and garden comps were the result of capitalizing on the extended growing season, along with our fall preparation activity in our grass seed, fall fertilizer, live goods and watering programs. For the ninth quarter in a row, we drove above-average comps in appliances as we continue to leverage our omnichannel offering through our leading brands, our breadth of assortment and strong Labor Day and Columbus Day events. Our kitchen department also posted above-average comps, with strength in organization and shelving as well as cabinets and countertops. And we also had solid performance in our core Pro product groups within rough plumbing and electrical. We continue to be excited about the effectiveness of our new…

Thanks, Bill, and good morning, everyone. Like Bill, I, too, have celebrated my 99th day with Lowe's, and I'm very excited to share with you the steps we are taking to improve store operations. When I joined the company, it struck me that some of the basic and foundational elements of operations were not in place. As an example, there are engineered standards for in-store processes like unloading a truck, flowing product from receiving to the sales floor or stocking the shelf to drive in-stocks, and labor scheduling systems were antiquated and ineffective, leading to payroll inefficiency and detracting from customer service. Other than cost of goods sold, payroll is the largest expense for the company and we have limited ineffective tools to track, allocate or monitor coverage. In addition to payroll inefficiency, stores were inundated with communications and reports with no prioritization. This lack of payroll efficiency, combined with nonexisting communication standards, led to process breakdowns like excessive out-of-stocks and a poor customer experience. Although these process challenges hindered our execution in the third quarter, I've encountered these types of issues before and have put solutions in place to solve them. Therefore, in the third quarter, we established an operations team with home improvement experts, took initial steps to simplify our focus and developed processes and procedures to address all identified issues. As part of simplifying operations, we're focusing the teams on key priorities and metrics while removing distractions and non-value-added tasks. To improve customer service, we've recently eliminated sales forecasting activities during the busiest hours of the day so that our associates can focus solely on selling and providing excellent service. This process eliminates competing demands and provides a clear, concise and consistent approach to deliver a repeatable and reliable customer experience across all stores. Earlier this month,…

Thank you, Joe, and good morning, everyone. I'm excited to be with you today. And while I know many of you from my past, I look forward to working with all of you as we position Lowe's for long-term financial success. While today is technically my first official day as CFO, over the past several weeks, I've spent a great deal of time immersing myself in the business. I've engaged with both the executive leadership team as well as the finance team here at the company. I've had the opportunity to both review and participate in the ongoing strategic planning efforts, and I strongly believe that the company is taking the necessary actions to be well positioned for success at both the near and long term. I've grown to appreciate the strong fundamentals of the home improvement market, driven by robust real residential investment and home price appreciation, and yet I've seen the existing challenges facing the Lowe's business. I've come away from the past few weeks with tremendous excitement about the future and believe we can create significant long-term value for all stakeholders, including both shareholders, customers and associates. This morning, I'll spend a few minutes reviewing the company's financial performance in the third quarter and provide an overview of our expectations for the balance of this year. As a reminder, in the first quarter of this year, we adopted the new revenue recognition accounting standard. And as a result, we reclassified certain items within operating income, the most significant of which was the reclassification of the profit-sharing income associated with our proprietary credit program from SG&A to sales. The adoption of the standard had no meaningful impact on operating income and no impact on comparable sales. Also, it was adopted on a modified retrospective basis so the prior…

[Operator Instructions] Our first question comes from the line of Michael Lasser with UBS.

If we look at your performance relative to your large competitor or relative to the category, clearly, it's a step back this quarter. Now I don't think anyone thought it was going to be easy, but Marvin, when can we expect to see some progress from Lowe's by narrowing these gaps to your competition?

Okay. Michael, I think for us, and I stated this in the prepared comments, we're really focused on creating a sustainable foundation in the third quarter. And we made a conscious effort not to chase short-term fixes or short-term results. In any quarter, retailers could make decisions on promotional cadence and special buys and those types kind of tactical things. We stayed away from all of those types of decisions because I wanted to give the team the appropriate time to really get to the root cause. And that's why I think it's appropriate to know that both Bill Boltz and Joe McFarland are celebrating their 99th day with the company today. So although we made great strides in our kind of reassessment of the business, we have a lot of really new executives. Having said that, we have an expectation that we're going to see the business improve going into 2019, but we're also expecting some short-term improvements in the business just based on all of the actions that the team has taken and some of the initiatives put in place in the third quarter. I mean, some very fundamental things that we're looking at that we think will deliver some short-term results will be just the simple improvement in customer service. And Joe talked about how removing tasks and designating service versus task time, those things are important. Bill talked about bringing some level of productivity to our end caps. Our end caps in the past have been used for billboards, not real sales productivity. So we think just that simple transition will add some value. The improvements we made in the supply chain and how we now have better coordination between supply chain and stores will improve our in-stocks and we'll see incremental improvement. So to answer your question specifically, we were not chasing short-term results in the quarter. And if there's an expectation that some of these chronic, long-standing issues can be fixed in a couple months, that's really unrealistic. And rather than trying to chase quick fixes, we want to fix it at the root and we think we're doing that. And that's why we believe that going into '19, you'll see this company start to have sustainable improvement month-over-month, quarter-over-quarter.

And Marvin, as you head into 2019, what chance that any sort of gains you make with the self-help and addressing some of the execution issues are simply just offset by what will probably be a tougher industry environment next year? And how are you preparing for that?

Well, I think for us, the great thing about our business is that we're in a $900 billion fragmented home improvement marketplace. And if you combine us and our chief competitor, that's less than $200 billion in revenue. And so there is a lot of market share up for grabs. We have been very transparent on the issues that we are dealing with as a company. Most companies are not going to be as transparent. The reason why that's important is because when we fix these very long-standing, chronic issues, poor reset execution, out-of-stocks, assortments not being localized, poor customer service, no real focus on the Pro customer, irrespective of what could happen with our competitor or competitors, plural, we have market share opportunity just because we've been underperforming as an individual company in a massive marketplace where we have about 10% share. And so we're not as concerned with kind of what's happening in other places, not even in the macro because we feel really good about the macro environment for home improvement. This is really more about us understanding the steps we need to take to improve execution. And the team will lay out some very specific short- and long-term initiatives at our December 12 Analyst and Investor Conference.

Your next question comes from the line of Christopher Horvers with JPMorgan.

Can you talk a little bit about the 180 basis point headwind from the inventory clearance and reconcile that to the sort of 15 basis point lift to sales from clearance? Is there any assumption in there on ticket cannibalization sort of stealing a more full-priced sale and thereby sort of diminishing the comp from that clearance activity?

Yes. Chris, the one reason why a retailer never desires to have a massive inventory liquidation process is because it really wreaks havoc on your numbers. But as Dave stated in his prepared comments, I mean, we believe that we saw some comp benefit early in the quarter from the inventory liquidation because it was being sold at a higher average ticket. As we've gotten to the month of October when we started to see the liquidation at its kind of most aggressive cadence, we believe that not only did it hurt average ticket, we think it cannibalized sale. So I remember as an anecdote being in the store and seeing a heater being clearanced in the month of October and I thought that was very odd. So after we followed up, I realized that, that was a heater from 2 seasons ago that had been trapped in the overhead because it had never been properly clearanced out. So if you think about that for a second, October is a time where we're really selling heating at a very high rate. But if you can trade down and get a unit that's roughly 60% to 70% off, it's going to cannibalize regular ticket items. And so we think it may have benefited us at the beginning of the quarter from a comp standpoint. But as the quarter progressed, specifically in October, we think it was a negative impact.

Chris, it's Dave. I think the good news is, while no company likes to liquidate inventory, we had about $500 million to liquidate. That's now largely behind us. So we're now positioned going into the back half of the quarter and into '19 kind of clean from that perspective. So I think we're well positioned to put the right inventory in the right locations to begin to improve performance.

Understood. I guess, I mean, just as a devil's advocate question, I mean, you talked about conversion issues at Lowe's. And so I guess, my question is, how do you necessarily know that, that sale would've been made if it weren't for that aggressive discount on the product?

Well, Chris, our conversion issues were less about the liquidation of inventory and more about just being out-of-stock. This is a very simple retail analysis. When customers walk into a brick-and-mortar location, they have an intention to either buy or to get some level of consultation on an item they're considering buying. And we're in the project business, so that happens quite often. But when we talk to our customers and ask the question what drove a decision not to buy when you physically showed up at a store, it is overwhelmingly that you were not in-stock. And so our conversion issues had nothing to do with the inventory liquidation. It had everything to do with the fact that we had 4 very problematic resets underway and we still have a significant number of out-of-stocks on our shelves. You can just simply walk our stores and see it with the naked eye. So as Joe McFarland mentioned, we put some operational processes in place that's going to help us to improve this, but out-of-stocks is also something you can't flip a switch on unless you're going to make some aggressive short-term decisions like air freighting in product or making some bad short-term decision. We chose not to do that, and we're actually fixing the reset process with an internal team that's going to own resets. We're having better coordination between supply chain and store operations, and we have a consistent in-stock process in the stores. And so conversion, for us, was driven almost exclusively by out-of-stocks. And so we're going to continue to just execute and improve in-stock, and we think our conversion will improve accordingly.

Understood. And then just one quick one for the model. How should we think about depreciation going forward?

I think it would be if you look at Q3, if you back up the charges that I indicated from the -- from my prepared remarks, it should be fairly consistent going forward. It will depend a little bit about what we do with Mexico and the ultimate disposition of that business.

Your next question comes from the line of Simeon Gutman with Morgan Stanley.

Maybe I missed it, but did you quantify how much you think all the reset activity and the out-of-stocks hurt your comps in the quarter?

We did not.

Is -- do you have a guess? Or is it too difficult to gauge?

Simeon, I've learned that guessing is probably not a good thing to do on an earnings call. But technically, it is a little too difficult to gauge. We spent most of the time, quite candidly, trying to get to the root cause of why these issues exist. Bill Boltz and his team spent a lot of time understanding supply issues, supply coordination issues, third-party reset issues, just in-store planning. And so we feel really good about the fact that we've identified root causes. So we really focus our time and attention on now trying to put those plans in place to solve those issues. We'll have a much more detailed and specific overview of this on our December 12 Analyst and Investor Meeting because we felt it was important to make sure that we communicate externally how we're solving this because we spent time in the last 2 calls talking about it being a chronic issue. And now we want to spend time about the steps we're taking to correct it.

Okay. I guess, within that question, I think paint, right, this category has been affected for, I think, for 2 quarters in a row. I figured maybe you have some guesstimate around on that business. And then maybe a way to think about it is, can you tell us what the comps were in the categories that weren't affected? And then for the answer, I would exclude probably outdoor and seasonal, just given that there was probably some hurricane stuff noise in there. So if we look at traditional categories, you did mention some above average, some at company average, but maybe you can give a little more color on the categories that didn't have some type of reset activity.

Well, Simeon, I think, for me, the best way to answer your question is that we had 4 negative comping categories for the quarter. All 4 had reset interruption issues. And so that's probably the most effective way to answer the question. Where we did not have reset issues, we had positive comps. Where we had reset issues, we had negative comps. And so I think to me, that's the best explanation of the impact of poor reset execution on the business. I think anything beyond that will just be data that may not be useful.

Fair enough, okay. And my real follow-up is you mentioned to us, I think it was in September, that there were a couple of Pro brands that Lowe's didn't have and I forget -- you didn't name the brands. I don't know if you could share with us what it is, but is -- what's the visibility on that? And does that -- trying to get new brands, does that take a back seat now to you fixing some of the core operations of the business?

Well, I'll do 2 things. So first, we're always going to talk about the brands that we have and the brands that we're very proud to have, and I'll let Bill talk about some of those Pro brands. And I will just say for the record, the brands that we don't have that we desire to have, we're actively working to try to get them in our assortment. But we will just take the practice of only talking about the brands we have because those are the companies we want to highlight. And Bill, just talk a little bit some of the Pro brands that we feel really good about that performed well in the third quarter.

Yes. So we're excited about what happened with water heaters and A. O. Smith. We're very excited about what happened with SharkBite. As I mentioned in my prepared remarks around the SharkBite plumbing fittings, we finished the rollout of Zoeller pumps. We finished the rollout of our tile setting material under MAPEI. We introduced new Pro cordless products under Bosch and Metabo HPT. And so as good merchants, we'll continue to evaluate assortments and look at where those opportunities are going forward and try to make sure that we're doing our best to offer the products and the brands that the customers want.

Your next question comes from the line of Steve Forbes with Guggenheim.

I wanted to start with the 5 key priorities you mentioned within the merchandising and store operational functions. Not to take too much from the Analyst Day, but can you briefly address sort of the anticipated timing of the completion of these initiatives? Is it a first half, second half '19? Just some general idea on the timing of the initiatives would be helpful.

So Steve, I'll hand it over to Bill and let him go first and ask him to keep it high level because, as you can imagine, we're still working on some of the really specific details of these. Although these initiatives were launched in the end of the third quarter, there are still some specific details we're working on. And I'll ask Joe to kind of appropriately stay a little high level on operations as well. So Bill can talk about those priorities for merchandising.

Yes. So we're continuing to evaluate talent and to bring in experienced leaders. And so that will continue as we go into the early part of next year. We want to have that done, obviously, as quickly as possible and as we work through some of the merchandising opportunities. Some of those categories I called out in our prepared remarks that will take us longer. Some of those will take into the back half of '19 because of the complexity. The ones that we can get done sooner, we'll obviously implement it as early as we can in the early part of 2019. So we'll take them as they come and continue to work through them on an issue-by-issue basis.

Okay. Joe, you want to talk about throughput?

And so for store operations, what I would say is we have identified all of the challenges that we have, certain things like simple process for receiving trucks, customer service. We have already begun implementing those as we think about the new payroll allocation system. We've already taken initial steps. However, that will flow into 2019. And so I'd say we're well underway, that we have identified all the root causes, and we're excited to share more as we get together in December.

Right. And then just a quick follow-up for Dave. You called out a bunch of the margin dynamics, right, during the quarter for gross margin. What about rising transportation cost and supply chain cost? Was that -- can you quantify that drag this quarter?

Yes. We've been watching that closely. Like all industry participants in the sector, transportation cost is a worry. I'd say that as we looked at our forecast for the balance of the year, we've included that in our guidance. I would say it's not a significant headwind at this point in time, but it's something we're watching closely as we cycle through the balance of this year and into next year.

Your next question will come from the line of Zack Fadem with Wells Fargo.

With your strategic review coming to a head, Marvin, could you talk about how your findings compare to your expectations going in? I'm sure you had some ideas around what needed to change. So I'm curious if you could speak to areas within your business that are maybe functioning better than you expected. And then for those areas underperforming, how does the magnitude of change needed compare to what you initially thought?

Okay. Zack, what I've been most pleased with is really the people side of the business. As I said in my prepared comments, I mean, we don't make it easy on our associates. I mean, we spend a lot of capital as a company over the last 7 years, but we haven't necessarily spent a lot of capital on making the stores more efficient, making our supply chains modern and just creating an easier work environment for our associates. And so our associates have been resilient. And I've visited all of our geographic markets, including Canada and our MSH operation for Pro. And in every case, I just walk away just being encouraged by our associates. I've mentioned the engagement with the community, and we were serving 50,000 meals to date for Thanksgiving for communities affected by the hurricane. This is a kind of a thing that I had no real impact on. It was just happening when I got here. And so that's part of the associates loving the business and the culture. And I would say the decisions we've made rather quickly were around leadership structure and organization. I felt that we needed to bring in some core retail experts. What I've learned in my successes and failures in retail is that when you're solving problems, it is best to go out and find leaders who've kind of been there and done it before. And so that's why when I look around the table at Don Frieson in supply chain and Bill Boltz in merchandising and Joe McFarland in stores and Dave Denton as our CFO and Seemantini as our new Chief Information Officer, et cetera, et cetera, we've gone out and recruited world-class leaders who've kind of been there, done it before, and that's required. And so mostly I was disappointed in what I found, but I felt like the need to bring in experienced leaders so that we could solve these problems quickly. And also, I just want to make sure that we have a more disciplined capital allocation process. As I mentioned earlier, a lot of these strategic reassessment and closing underperforming stores, exiting noncore businesses, getting out of environments where we can't really be competitive because we can't get to scale like Mexico, is all a part of making sure we reallocate capital and invest in creating a great home improvement retail environment. And so that's kind of where we are and we'll continue to make the necessary changes. But we feel great about the future of this company. I mean, we can identify obvious shortcomings in what we're doing on a daily, weekly basis. We can look at where we're underperforming from a sales perspective and we could point exactly to what's causing it. And to me, that's very encouraging because we know how to fix it. And so we're going to continue to push forward.

Got it, Marvin. That's helpful. And I think a quick one for Dave. First of all, welcome aboard. And then on the store closings and the additional initiatives announced today, curious if you could speak to your approach to some of the cost savings coming out next year. And how do you think about just the process of redeploying and reinvesting those savings? And are there any of those savings that you would expect to drop to the bottom line next year?

Well, obviously, we're making these investments and these decisions to position the company for long-term financial success. There's no doubt about that. And I think the team is really focused against that very intensely. I do think that the savings that are going to be generated from these activities are partly going to be invested a little bit as we think about repositioning the company and some of the efforts you heard from both Joe and Bill today. But importantly, as we think about that future and the future growth and the returns on the business that we have today, this will largely fall to the bottom line and really enhance those returns over the next future periods.

Our next question will come from the line of Greg Melich with MoffettNathanson.

A couple questions. I just want to make sure I piece together the guidance and the inventory adjustments right. If I got it right, there's $320 million of inventory hit in the third quarter. And I think, Dave, you mentioned around $500 million over the course of the year. If we think about either of those numbers, it's sort of 60 to 90 bps of margin hit this year. Should we be thinking about that as the -- if there was 100 -- 135 to 140 bps of charges, right, mostly noncash, that really this year, EBIT margins are down 90, 100 bps, but that inventory is 60 to 90 of it and that's sort of a clean like-for-like slate into next year? Am I piecing it together right?

Well, a little bit. Let me just step back a minute. We had roughly $500 million of inventory to clear. We roughly cleared that at a 40% discount. So I think that's largely behind us. As we cycle into Q4, we're essentially clean from the inventory rationalization perspective. So don't think about a hangover into Q4. Think about that being complete in Q3.

Got it. And so the -- if we took just the third quarter -- and that's now behind us and that what we saw in the gross margin, that $320 million to $330 million, is when we get to next year, that's -- that we're clean when we think about it as sort of a run rate of margin. Great. And then second and sort of bigger picture on just traffic and conversion. I think, Marvin, you mentioned that traffic was still positive, but we basically have transaction counts down. How do you measure what traffic really was versus that conversion? I mean, do you -- was it the store traffic was up 1%, but we were down -- transaction counts down 1% and that's the difference in terms of close rate?

Well, I think a couple of ways. Measuring traffic online is just pure data driven, so that's something we have 100% visibility to like any other e-commerce or brick-and-mortar companies with an e-commerce platform. So that's pretty straightforward. When we look at traffic in the stores, I mean, we have monitoring devices to measure traffic. Our environment is more difficult to measure conversion because we're a project business. And so we're going to shift our discussion from conversion to transactions. I think that is a better way to understand a year-over-year comparison of our business. So having said that, we still feel very good about traffic, both online and in-store base, and how we measure it. But we understand that we have challenges in driving transactions and/or conversion based on the traffic. When we look online, we know we have some issues with functionality that we're addressing. We also note we have issue with search and navigation and ease of checkout. If you look at our mobile app, you can see an app that desires to be much more robust and we're in the process of delivering on that. As we look in the store, I go back to my previous comments, we don't want to make this overly complicated. When a retailer is not delivering on the traffic that's walking in your store, there really are a couple of basic reasons why. Either you are priced incorrectly from what you advertised or you're out of stock. And we feel good about the consistency of our pricing. And all of our data tells us that we're out of stock. And that's why we put such a huge emphasis on addressing this issue. And so we understand the root cause. We understand how we got here, and now we're working to create a sustainable solution to fix it.

Our final question will come from the line of Scot Ciccarelli with RBC.

I guess, this is a bigger picture view for a second as well. When you kind of look at your performance against Home Depot, the bulk of the sales gap on a per-store basis, Marvin, as we've talked about, is really on the Pro side. If you were to get the stores right where you want them, the in-stocks where you want them, I know this is an opinion, but over what kind of time frame do you think you would start to take market share back on the Pro side? And related to that, why would a Pro change who their incumbent product supplier is?

No, Scot, it's a fair question. So I'll speak specifically on the Pro customer. The Pro customer is a very important customer, but they are very, very simple customers. And this customer is looking for a couple of fundamental things. First, they're looking for a great price. They're looking for service that saves them time because time is money, and they're looking for the brands that they identify with. That's really it. They're pretty much agnostic on anything else. And so Lowe's has proven that you can have a dominant market share in Pro and lose it because at one point, Lowe's had dominant market share in Pro and they didn't maintain it because primarily of those 3 things I outlined were no longer competitive advantages. And so for us, we're going to make sure that we are competitively priced. That's something that Bill and his team are taking a lead on. We're going to make sure that we have great service because, again, time is money and servicing a Pro is not giving them product knowledge. It's about having job-lot quantities. It's about giving them the ability to buy and stage product. It's the ability to load, it's the ability to speak their language and to engage them at the Pro desk or engage them online. And now the third level is to go out and get the brands. And as Bill and I both mentioned, we're actively engaged in trying to fill our assortment with brands that we currently don't have. When you do those things, the Pro is totally agnostic to the channel in which they shop because it's all about those 3 things for them.

And do you think that if you kind of match apples-to-apples, the Pro would come to Lowe's instead of Home Depot or...

Well, I think the key is we spend very little time looking across the street. We are a customer-centric company. And what we believe is if we take care of the customer, everything else will take care of itself. And I'll just remind you that we operate in a $900 billion marketplace and so we don't care a whole lot about what's happening across the street because between Lowe's and our largest competitors, less than $200 billion in market share, which means there's more than $700 billion up for grabs in this really fragmented environment. And so for us, it's less about what's happening with a competitor, it's more about how we serve customers and how we go out and we take share in this fragmented marketplace that we're in. Okay, thank you very much. And look, we appreciate your time and attention on the call, and we look forward to speaking with you again on our fourth quarter call, which will be Wednesday, February 27. Thanks, and have a very blessed Thanksgiving.

Ladies and gentlemen, this concludes today's conference. Thank you all for joining, and you may now disconnect.